Eligible for a Health Savings Account?

To make or receive contributions to an Health Savings Account (HSA), the IRS specifies you must meet all of the following requirements:

• You’re enrolled in or will enroll in a high deductible health plan like K-C’s Consumer Driven Health Plan (CDHP) Blue with HSA or CDHP Green with HSA,
• You’re not enrolled in a separate non-high deductible health plan such a spouse’s HMO or PPO,
• You’re not enrolled in Medicare, Medicaid, or TRICARE,
• You haven’t received benefits from the VA for the last three months,*
• You can’t be claimed as a dependent on another person’s federal tax return, and
• You or your spouse, if married, can't have received or made contributions to a General Use Flexible Spending Account within the calendar year in which you want to make or receive HSA contributions.

If you don’t meet all of the requirements listed above – meaning you’re not eligible for an HSA – you’ll be given an opportunity to designate your HSA ineligibility for the upcoming year during enrollment. You’ll then be offered a CDHP with a Health Reimbursement Account (HRA) that meets IRS regulations.

Medical Veterans Affairs Benefits

The IRS applies a restriction on making or receiving HSA contributions if you receive medical Veterans Affairs (VA) benefits (excluding care for a service-connected disability or preventive care) for the three months prior to an HSA contribution.

Example:

If you have surgery at the VA hospital in June (excluding care for a service-connected disability), you’re ineligible to make or receive HSA contributions for the three months prior to your surgery (March, April, and May). To avoid a tax penalty, you must follow the HSA correction process and withdraw any contributions made to your HSA account while ineligible.

However, if you’re eligible for medical VA benefits, but you’ve not actually received services (or only received services for a service-connected disability or preventive care) in the three months prior to making or receiving an HSA contribution, you're considered HSA eligible and those contributions are yours to keep without tax penalty.

If the IRS restriction on VA medical benefits impacts your ability to make or receive HSA contributions, you still have the option to enroll in the CDHP Blue or CDHP Green with HSA. However, it’ll require you to manage your contributions during any period you’re ineligible by contacting Empyrean through the K-C Benefits Information Line or by logging on to kcbenefitcompass.com to stop and start your contributions in compliance with IRS guidelines. If you don’t want to manage your contributions during ineligible periods, you may want to consider the CDHP with HRA. Find more details about the CDHP with HRA below.

CDHP with HRA

If you’re ineligible to contribute to the HSA, you’re eligible to enroll in the CDHP with HRA during enrollment. The way the CDHP with HRA works is similar to the CDHP Blue with HSA. The two main differences are:

Where K-C's Contribution Goes: K C puts money into an HRA rather than an HSA, but in the same amounts — $700 for Individual or $1,400 for 2-Party and 2-Party Plus coverage.

Making Paycheck Contributions: You can't contribute to the HRA.

Note that the comparison chart below describes coverage for in-network services only. A separate deductible, out-of-pocket maximum, and coinsurance apply to out-of-network services.

• 2023 Medical Plan Comparison Chart

  	CDHP with HRA
  Your 2023 annual medical paycheck costs (excludes tobacco-free discount and working spouse/partner surcharge)	$582 Individual $2,380 2-Party $4,194 2-Party Plus
  Tobacco-free discount	($240)
  Working spouse/partner surcharge (New for 2023)	$1,200
  Deductible (Increased from 2022)	In-Network:             Out-of-Network: $2,000 Individual       $4,000 Individual $4,000 2-Party       $8,000 2-Party $4,000 2-Party Plus      $8,000 2-Party Plus
  Out-of-pocket maximum (Increased from 2022)	In-Network:              Out-of-Network: $4,000 Individual      $8,000 Individual $8,000 2-Party          $16,000 Individual $8,000 2-Party Plus   $16,000 Individual
  K-C’s HRA contribution	$700 Individual $1,400 2-Party $1,400 2-Party Plus
  Preventive care	In-Network: K-C pays 100%. Out-of-Network: You pay 100% until you reach the out-of-network deductible, then K-C pays 60%.
  Coinsurance	In-Network: You pay 100% until you meet the in-network deductible, then K-C pays 80%. Out-of-Network: You pay 100% until you meet the out-of-network deductible, then K-C pays 60%.
  Office visits
  Urgent care
  Emergency room
  Hospitalization
  Lab, X-ray, imaging
  Mental health inpatient
  Mental health outpatient
  Physical (includes chiropractic), speech, and occupational therapy	In-Network: You pay 100% until you meet the in-network deductible, then K-C pays 80% (combined 60-visit annual max). Out-of-Network: You pay 100% until you meet the out-of-network deductible, then K-C pays 80% (combined 60-visit annual max).
  	Prescription drugs
  Maintenance	K-C pays 100% for certain maintenance prescriptions. 1
  Generic	You pay 100% until you meet the deductible, then K-C pays 80%.
  Preferred brand
  Non-preferred brand

  1. To learn which maintenance prescriptions are included, log in at caremark.com or call CVS/caremark.